Distinguish between managerial and economic performance

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Performance measurement in companies has traditionally been based on feedback on the budget, expressed in financial terms. There is now much discussion about alternative methods of performance measurement to ensure that a company achieves its overall goals.

Required:

Problem 1. Comment on the effectiveness of the use of return on investment (ROI) and residual income (RI) as performance indicators, showing under what circumstances a company may use these.

Problem 2. Discuss why it is preferable to distinguish between managerial and economic performance.

Reference no: EM132958476

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